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Covidien Launches Nellcor SpO2

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On June 21, Covidien plc , global innovator and manufacturer of healthcare products, announced the launch of Nellcor SpO2 single parameter module in North America, European Economic Area (EEA) and other select overseas markets. It is for treatment of respiratory ailments.

The single parameter module will be used with the Philips (PHG - Analyst Report) IntelliVue patient monitoring platform to aid continuous monitoring of oxygen saturation through pulse oximetry technology.

This latest product offering is an addition to the Oximetry and Monitoring Products of the company under the Medical Devices business segment. Given the global trends and changes in demographics and lifestyle which bolster cardiac and respiratory disorders, the integration of Covidien’s module with Phillips patient monitors represents conjoined product use of two trusted brands with relevant product portfolios.

As per management at Covidien, the single parameter module of Nellcor SpO2 monitoring makes it compatible with Phillips’ market leading IntelliVue patient monitors. The product offering is a cost-effective tool to detect and diagnose potentially fatal events and enable clinicians to take a holistic view of patients’ respiratory function status.

This latest addition to the company’s wide portfolio underlines its commitment to enhance patient safety across general as well as critical areas of hospital care.

Covidien expects to benefit from the integration, as Phillips enjoys the leading position worldwide in patient monitoring systems and continues to tap growth geographies to boost revenue. On the other hand, the upgradation in the quality of patient care and safety using Covidien’s latest offering will help Phillips to focus on its strategy of portfolio strengthening and accelerating growth.

The Nellcor SpO2 module is integrated with the company’s market leading Nellcor OxiMax pulse oximetry technology. Covidien has built on the technology to promote critical care in clinical decision making and thereby improve standards of care.

The Nellcor OxiMax technology reduces interference with cardiac signals offering accurate and reliable monitoring even in difficult situations like low perfusion. This is possible by observing the signs which signify early warning of serious respiratory problems. Specifically, these are the cardiac based readings from SpO2 module and pulse rate.

TheNellcor SpO2 module is compatible with the entire portfolio of Covidien’s Nellcor Sensors. It is also compatible with a variety of Phillips monitors such as the Philips IntelliVue MP40 through MP90 monitors and the Philips IntelliVue MX 600, MX 700 and MX 800 monitors.

The Nellcor SpO2module is yet another addition to Covidien’s Medical Devices business segment. Medical devices segment comprised 68% of net sales in the most recent quarter with segment revenue figures showing an increase of 7% year over year to $2.0 billion. New products such as Nellcor SpO2module, V-Loc suturing device, Endo GIA Radial Reload, HALO90 ULTRA Ablation Catheter, Versaport trocar and others launched earlier this year, are expected to continue accelerating segment growth.

Covidien plans to bolster its sales with the help of strategic acquisitions and successful launch of its new products. It remains committed to rolling out new products and technologies consistently. Management expects that a focus on product innovation and aggressive portfolio management will yield positive results in the long run.

The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. This is in agreement with our long-term Neutral recommendation.

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